What does CIF value mean for this tax?

CIF stands for Cost, Insurance and Freight — the vehicle's landed value at the Sri Lankan port, before any local duty. It is usually higher than the price printed on the local sale agreement, so ask the Department of Motor Traffic or Customs for the figure used on your vehicle's original import documents.

Can I just wait out the 5 years instead of paying the tax?

Yes. If you can wait until 5 years have passed since the vehicle's registration date, you can transfer it like any normal used vehicle, with no extra permit tax, only the usual RMV transfer fee.

Does the 5-year rule apply to all permit vehicles?

The 5-year condition and 10% CIF tax apply to vehicles imported under the standard Import Control Licence/duty-free permit framework. Diplomatic, UN and some other permits can carry their own separate conditions, so check the letter that came with your specific permit.

Who actually pays the 10% tax, the buyer or the seller?

In practice it is usually negotiated between buyer and seller and settled before the CR book is transferred, but it is paid to the Commissioner of Motor Traffic at the time the transfer papers are handed over, so agree in writing who is covering it before you accept any advance.

Will the duty-free permit scheme ending in the 2027 Budget affect vehicles already registered on an old permit?

As of November 2026 the government has only said it plans to stop issuing new duty-free permits and cancel unused ones in the 2027 Budget. There is no confirmed change yet to the 5-year condition on vehicles already imported and registered, but check for updates before you rely on this changing.

Guide8 min read8 views

Can You Sell a Duty-Free Permit Vehicle Before 5 Years in Sri Lanka?

Updated 1 November 2026 · Written by the Wahanaya.lk team

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Yes, but the vehicle is usually tied to a 5-year condition from its registration date. Selling earlier means paying a 10% tax on the vehicle's CIF value to the Department of Motor Traffic before the transfer can go through.

If your car, van or SUV was imported on a duty-free or concessionary import permit — the kind issued to senior public servants, university academics, military officers, or migrant workers sending foreign exchange home — you can sell it before the usual 5-year condition period ends. You just can't do it like a normal used-vehicle sale: the Department of Motor Traffic (RMV/DMT) will want a 10% tax on the vehicle's CIF value settled first, as of November 2026, before it will register the transfer.

This guide walks through what the condition period actually means, how the early-sale tax works, what documents you need, and how to handle the sale step by step.

Key facts

Vehicles imported under an Import Control Licence (duty-free/concessionary permit) "should not be sold, transferred or alienated" until 5 years from the date of registration, according to the Department of Import and Export Control's used-vehicle import policy.
The 5-year clock starts from your vehicle's registration date, not the date you bought the permit or imported the car.
Selling before the 5 years are up is possible, but it triggers a 10% tax on the CIF (Cost, Insurance, Freight) value of the vehicle, payable to the Commissioner of Motor Traffic when the transfer papers are handed in.
This tax exists specifically to stop permit abuse — selling a duty-free vehicle early used to let people pocket the duty saving, which is what the tax is meant to claw back.
A normal RMV transfer also needs an MTA 6 (application for transfer) and MTA 8 (notice of transfer), the original CR book, a valid revenue licence, and NIC copies of both parties.
The seller must send Copy "C" of the MTA 8 to the RMV by registered post within 14 days of the sale; the buyer must lodge the transfer documents within 14 days of buying, or pay a penalty.
As of November 2026, the government has said it will stop issuing new duty-free permits and cancel unused ones through the 2027 Budget — this is about future permits, not a confirmed change to vehicles already registered under existing ones.
Different permit types (diplomatic, UN, migrant worker EV schemes) can carry their own separate conditions on top of the general rule, so always re-check the letter that came with your specific permit.

Can you legally sell a permit vehicle before 5 years in Sri Lanka?

Yes, but only after the early-transfer tax is settled. The Department of Import and Export Control's policy for vehicles brought in under an Import Control Licence states the vehicle should not be "sold, transferred or alienated" until 5 years from its registration date — but it also sets out the tax that applies if a transfer does happen earlier. In practice, that means the restriction isn't an absolute lock; it's a financial condition. If you try to transfer the CR book at the RMV before the 5 years are up without paying this tax, the transfer will be refused.

How is the condition period counted — from import, purchase, or registration?

It runs from the date the vehicle was registered in Sri Lanka, not from when you got the permit or when the ship landed. The same policy document requires the vehicle to be registered in the permit holder's name within two weeks of release from the port, and the 5-year clock then starts from that registration date. If you're not sure of your exact registration date, it's on your CR book.

How much tax do you pay to sell a duty-free permit vehicle early?

It's 10% of the vehicle's CIF value, according to both the Department of Import and Export Control's policy and reporting in the Sunday Times on this tax. CIF (Cost, Insurance, Freight) is the vehicle's landed value at the Sri Lankan port — broadly, the purchase price plus international shipping and marine insurance — and it's usually a different (often lower) figure than what the car would sell for on the local market today. This isn't a fee you can estimate from the sale price; you need the CIF figure that was used on the vehicle's original import/Customs documents. Ask the RMV, Sri Lanka Customs, or the Department of Import and Export Control which figure applies to your vehicle before you commit to a sale price with a buyer.

Who pays the 10% tax — you or the buyer?

The law doesn't assign this to one side; in practice it's negotiated between seller and buyer, and whoever owes it, it's paid to the Commissioner of Motor Traffic at the time the transfer papers are submitted — before the new CR book can be issued. Because this tax can be a large unplanned cost, agree in writing, before you take any deposit, exactly who is covering it. Many sellers simply build it into the asking price, and some buyers walk away once they learn a permit vehicle carries this extra cost, so disclose it upfront in your ad rather than after you've found a buyer.

What documents do you need to sell a permit vehicle before 5 years?

On top of the usual transfer paperwork, keep these ready:

The original CR book (Certificate of Registration)
The original duty-free/concessionary permit or import approval letter
Any Customs/import documentation showing the vehicle's CIF value
NIC copies of both seller and buyer
A valid revenue licence
Proof of the 10% tax payment once you've made it (keep this — a buyer or a future RMV check may ask to see it)
The MTA 6 (application for transfer) and MTA 8 (notice of transfer) forms, signed by both parties

Step-by-step: selling a permit vehicle before the condition period ends

Check your registration date on the CR book and confirm you're still inside the 5-year window.
Get the CIF value confirmed with the RMV, Customs, or the Department of Import and Export Control using your import documents.
Work out the 10% tax on that CIF figure, and decide with your buyer who pays it.
Agree a price and advertise honestly — disclose that the vehicle is still under permit conditions. You can list it on /post-ad, and check what similar vehicles are going for first with a /price-check.
Settle the tax at the RMV/DMT office when you submit the transfer papers.
Complete the normal transfer: MTA 6 and MTA 8 forms, CR book, revenue licence, and NIC copies for both parties.
Send Copy "C" of the MTA 8 to the RMV by registered post within 14 days of the sale, and keep your copy of everything.
Get paid safely — use a bank transfer you can confirm has cleared before handing over the vehicle and keys, and arrange to meet the buyer in a safe, public place if you're exchanging documents in person.

If anything about your specific permit or tax calculation is unclear, ask in the /forum — other sellers who've been through a permit-vehicle sale, or buyers who've handled one, can often point you to the right RMV counter or share what they were charged.

Does this rule apply to every type of permit vehicle?

Not necessarily in exactly the same way. The 5-year condition and 10% CIF tax described above apply to vehicles brought in under the general Import Control Licence/duty-free permit framework used for senior public servants, academics, and similar categories. Diplomatic permits, UN staff permits, and migrant-worker EV import schemes can come with their own, separate conditions set by the issuing body (the Ministry of Foreign Affairs, the Ministry of Labour and Foreign Employment, or Treasury, depending on the scheme). Before you advertise, re-read the letter or conditions document that came with your specific permit, or check with the office that issued it.

Should you just wait until the 5 years are up instead?

If your timeline allows it, waiting avoids the 10% CIF tax entirely. Once 5 years have passed from your registration date, the vehicle can be transferred like any other used vehicle, through the standard RMV process, with only the normal transfer fee and no permit-related tax. If you're close to the 5-year mark, it's often worth holding off a few months rather than paying a tax that can run into hundreds of thousands of rupees, depending on the vehicle's CIF value.

Does the plan to end the duty-free permit scheme change anything for you?

Not yet, as far as confirmed rules go. As of November 2026, Lanka Business Online has reported that the government intends to stop issuing new duty-free vehicle permits and cancel existing unused permits through the 2027 Budget, as part of wider fiscal consolidation. That reporting is about permits that haven't been used to import a vehicle yet — it does not describe any change to the 5-year condition or the 10% CIF tax for vehicles that are already imported, registered, and sitting with an owner. Because this area is being actively reviewed, check the latest Budget announcements or ask the Department of Import and Export Control directly before you plan a sale around any expected change.

Where to go if you're unsure

The RMV/DMT office that handles your vehicle's district, and the Department of Import and Export Control, are the two places that can confirm your exact registration date, CIF value, and tax due. Before you list the car, it also helps to browse similar /vehicles to gauge demand, run a /price-check so your asking price already accounts for the tax, and read through /safety-tips for safe viewing and payment practices once you have a buyer.

Sources

Questions

What does CIF value mean for this tax?: CIF stands for Cost, Insurance and Freight — the vehicle's landed value at the Sri Lankan port, before any local duty. It is usually higher than the price printed on the local sale agreement, so ask the Department of Motor Traffic or Customs for the figure used on your vehicle's original import documents.
Can I just wait out the 5 years instead of paying the tax?: Yes. If you can wait until 5 years have passed since the vehicle's registration date, you can transfer it like any normal used vehicle, with no extra permit tax, only the usual RMV transfer fee.
Does the 5-year rule apply to all permit vehicles?: The 5-year condition and 10% CIF tax apply to vehicles imported under the standard Import Control Licence/duty-free permit framework. Diplomatic, UN and some other permits can carry their own separate conditions, so check the letter that came with your specific permit.
Who actually pays the 10% tax, the buyer or the seller?: In practice it is usually negotiated between buyer and seller and settled before the CR book is transferred, but it is paid to the Commissioner of Motor Traffic at the time the transfer papers are handed over, so agree in writing who is covering it before you accept any advance.
Will the duty-free permit scheme ending in the 2027 Budget affect vehicles already registered on an old permit?: As of November 2026 the government has only said it plans to stop issuing new duty-free permits and cancel unused ones in the 2027 Budget. There is no confirmed change yet to the 5-year condition on vehicles already imported and registered, but check for updates before you rely on this changing.

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